Facebook unveiled a share buyback

Facebook unveiled a share buyback scheme yesterday, saying it would repurchase up to $6 billion of its stock as its investors brace themselves for slower growth next year… The move is an unusual one for a company like Facebook, which went public in 2012. Until now, Mark Zuckerberg, Facebook’s founder and chief executive, has been better known for high-priced acquisitions such as his $22 billion WhatsApp Messenger deal and $2 billion purchase of Oculus VR, both in 2014. Capital return programmes are associated more closely with older, slower growth companies that are trying to attract a different kind of investor. Alphabet, parent company of Google, which went public in 2004, did not begin returning cash to shareholders until just last year. A month ago, Alphabet announced a further $7 billion buyback after completing the previous $5.1 billion repurchase. Silicon Valley companies have amassed huge hordes of cash in recent years. Moody’s has estimated that tech firms will own almost half of the $1.77 trillion held in cash by non-financial companies by the end of this year.

 

Tim Bradshaw

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